Nortel to Shed Yet Another Business Unit

Posted by: Olga Kharif on December 23, 2009

Bankrupt gearmaker Nortel has just inched closer to becoming a gearmaker no more. On Dec. 23, the company announced a preliminary agreement to sell a unit that makes software and gear for making cheap Web calls to telecom gearmaker Genband for $282 million, a sum that is subject to adjustment.

The agreement is not final: More companies could bid for the unit in an auction early next year. Nortel has already sold a number of other business units over the summer.

Once the sale of this unit, called carrier VoIP and application solutions, is complete, Nortel will be left with only a few holdings, including a unit that sells so-called multi-service switches, which direct traffic along communications networks. It also still owns the majority stake in the LG-Nortel joint venture, which has sold wireless telcommunications equipment to carriers in South Korea. And Nortel still owns as much as $2 billion worth of patents, which it might hold on to or sell separately. I suspect that Nortel will finish selling its assets in the first half of 2010.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.